The furphies fly in the Great Free TV Handout Debate

At last, more than a week after it was announced, the media and the Opposition are starting to give the Government’s $500m handout to the TV networks a proper shake.

It took Crikey jumping up and down, and the revelation of Stephen Conroy’s skiing “tryst”, as the Sunday Telegraph put it, to do so, which shows just how childish the media can be. I’ve got stuck into Stephen Conroy on a regular basis lately but the focus on his Colorado holiday is absurd. The idea that Conroy had to go on a skiing trip with Kerry Stokes to craft such a deal (rather than, say, picking up a phone and calling him) is nonsensical, because apart from anything this was a decision made by Kevin Rudd and it involved all the networks.

Jonathan Holmes on radio this morning suggested that the handout wasn’t quite as simple as I’d made out, because media analysts had told him there was some justification for the cut because of the costs of digitization.

I don’t know what analysts you’ve been talking to, Jonathan, but they sold you a pup. Mind you, it’s the same mangy little mongrel that the Prime Minister paraded at a press conference this morning, when he drew on what was obviously a long and carefully-prepared brief to defend the decision and justify it by saying that the networks had digitization costs.

How hard can this be to understand? THE NETWORKS HAVE ALREADY BEEN COMPENSATED FOR THEIR DIGITIZATION COSTS. Hello? Which part of this do people not comprehend? The networks were given – given, didn’t have to bid for, were given – 7 Mhz of broadcasting spectrum to use, and were given a moratorium on competition from a fourth free-to-air licence, to cover the costs of digital transition.

A fourth FTA licensee would, based on conservative estimates that it would initially struggle to achieve market share, take $150-200m pa worth of revenue off the incumbents. Which over the last decade is worth a couple of billion dollars.

And that direct ban on competition comes on top of the systematic hobbling of subscription television, which has in effect been prohibited from competing with the FTAs by the anti-siphoning list, at the cost of Australian sporting rights holders and the competitions, professional and non-professional, they run.

Regional broadcasters, including that owned by noted Bermudan Bruce Gordon, are also getting $260m for their direct costs of digitization. To Gordon’s credit, admittedly, WIN has been the only broadcaster who has seriously pushed digital and tried to expedite switchover.

This was all decided back in 2000. Maybe that’s too long ago for analysts to remember.

Rudd talked at length this morning about the high cost of ensuring everyone gets a digital signal. But hey - luckily the Government is ALREADY giving a lot of help to the broadcasters there as well. In January, the Government announced it was spending $160m over four years to put all FTA digital services on satellite so that people who can’t get terrestrial digital transmission won’t miss out. The only thing the broadcasters are contributing is the conversion of about 100 existing self-help sites to digital.

How much clearer do I have to be? Their digital costs have already been massively subsidized and the process of addressing blackspots is also being funded by taxpayers.

But the handouts don’t stop there, of course. Just before Christmas, in a move only Glenn Dyer picked up, ACMA approved the FTAs’ new code of practice that significantly changed the rules on advertising in favour of the networks – including election advertising. The networks gave themselves an extra minute of advertising for political ads during election periods. But they already charge political parties – subsidized by taxpayers - top dollar for political ads, so the extra minute is simply an additional minutes’ revenue. That’s nearly 70 hours every election of extra advertising time and therefore revenue.

See that’s the thing about the free-to-airs. Nothing is ever enough for them. No handouts, no rort, no protection is ever enough. They just want more, more, more - and they usually get it.

Holmes also suggested this wasn’t a handout because it was simply a reduction in the tax they would have otherwise paid. Sorry Jonathan, but a handout is a handouts whether it’s disguised as a rebate or comes as a cheque. That money was locked into Forward Estimates, and now there’s a $1-2b hole where it used to be. It will have to be made up elsewhere.

The Prime Minister also tried this morning to turn the issue back on Tony Abbott by demanding he furnish evidence that it was a bribe. Having mounted his high horse, Rudd galloped to defend the honour of Gallery journalists like Laurie Oakes and Mark Riley.

No one suggests for a minute — or at least I certainly don’t suggest — that the handout somehow will affect in the slightest the way TV journalists do their job. But the 45-60 seconds nightly news programs devote to politics during election period are regarded by parties as critical to who wins elections. Until recently, you could have put the front pages of the tabloids into that category as well but their falling readerships have limited their influence.

So shaping those television images and the stories that accompany them are fundamental to the major parties’ election strategies. And regardless of the journalists involved, ultimately it is network executives who choose what stories go to air, and what stories do not. Bias is rarely in coverage (unless you’re talking about The Oz). It’s in the story selection and what doesn’t make it to air.

Once again the FTA networks have been looked after. Usually consumers have only paid indirectly, through higher prices because businesses have higher advertising costs due to lack of competition, and through having to fund their own entertainment because what the FTAs offer is dross. Now all taxpayers are paying, and as usual they’re getting nothing in return.